Lately, I have noticed that there’s a lot of confusion and wrong information floating around about down payment assistance, so I am here today to clear things up. If you’re considering buying a home, these are things you should know.
Down payment assistance programs (DPAs) can vary greatly, but most are backed by the state of Texas. They can help a wide variety of clients, depending on their income level, if they’re married, whether or not they’ve owned a home before, and more. Some DPAs require that the clients pay the money back, and some don’t. It just depends on which program the client selects, and we present them all to the client so they can have a full picture.
In our current market, assistance can be anywhere from 1% to 5% of the purchase price for the home. For example, if the assistance is 3% for a $200,000 home, that’s a $6,000 value. A lot of this depends on income level, and the limits for that have steadily gone up to just over $100,000 for most programs. Plus, many DPAs even allow previous homeownership.
“Down payment assistance programs can help a wide variety of clients.”
You should also know that the minimum credit score for most programs is 620. In addition, DPAs typically don’t make the loan process take any longer than normal. Still, most require that the client stays in the same type of loan for at least three years.
DPAs can be used with any loan type, including conventional, FHA, VA, and USDA. This is especially great with VA and USDA loans because normally that means the client can close with almost no money coming out of their pockets, which is fantastic! All the client has to do is take a homeownership course online and get the certificate.
These are all things you need to know about DPAs. It was all a very general overview, so if you have any specific questions, please feel free to reach out. It doesn’t cost a penny to talk, so call me at (210) 215-4400. I look forward to hearing from you.